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An ex-dentist and co-owner of a now-closed go-go bar in New Jersey, his wife and 7 others allegedly stole more than $12M, authorities say
The group allegedly took part in an elaborate scheme that involved stolen credit cards and gift cards
The alleged scheme was carried out by Kevin Lipka, 63, of Livingston, New Jersey, and his wife, Shelly Lipka
A former dentist who was co-owner of a now-closed go-go bar in New Jersey, his wife and seven associates are all facing charges in connection to an elaborate scheme in which they allegedly stole more than $12 million, authorities say.
According to authorities, an investigation revealed that from April 2014 to July 2016, the nine individuals allegedly conspired to steal over $12 million by defrauding retailers, banks, credit card processing companies and credit card holders.
New Jersey Attorney General Gurbir S. Grewal announced the 19-count state grand jury indictment charging each of the nine individuals with racketeering in the first degree, conspiracy in the first degree and three counts of money laundering in the first degree.
The alleged scheme was carried out by Kevin Lipka, 63, of Livingston, New Jersey, and his wife Shelly Lipka, 62.
Lipka is a retired dentist who was co-owner along with his wife of the company She-Kev Inc., which did business as Smiles II, a strip-club bar on Route 46 West near Route 10 in Roxbury, New Jersey.
The ring involved using stolen credit card information and fraudulently obtained gift cards. Prosecutors say the stolen credit card information was purchased on the “dark web” and “cloned” onto blank plastic cards with magnetic strips using a machine that produces useable cards. These cards were allegedly used to buy pre-paid gift cards for retail stores, including Target and Home Depot.
Additionally, the gift cards allegedly were converted to cash through phony transactions at Smiles II, and the proceeds were divided between the individuals who supplied the cards and the other partners at Smiles II.
Officials claim that Lipka and his partners at Smiles II allegedly swiped the cards through card processing devices to generate proceeds that went into the business accounts of She-Kev Inc.
The investigation also revealed another facet of the alleged scheme, which involved phony sales of cars on eBay and Craigslist, where prospective purchasers were instructed to use gift cards in the transactions, which were then processed at Smiles II.
In other alleged scheme, the group obtained gift cards through “grandparent” scams, in which an elderly victim is contacted by someone posing as the grandchild or nephew of the victim and claiming to need bail money to be released from jail.
The attorney general’s office also alleges that Lipka and certain associates fraudulently returned expensive merchandise for store credit to The Home Depot that had been stolen from the retail chain. They would allegedly then sell the store credit on a website that engages in gift card buyback or Lipka would use the credit for items related to the construction of a luxury home he was building.
Authorities claim that Lipka was involved in illegally returning about $368,000 worth of merchandise to The Home Depot.
As a result of the racketeering case, the Division of Criminal Justice has placed liens on the bar in Roxbury, two homes owned by the Lipkas in Livingston worth a total of about $4 million, two homes owned by Lipka in Essex Fells and Belvedere, a vehicle, and multiple bank accounts.
The first-degree charges carry a sentence of 10 to 20 years in prison and a fine of up to $200,000.
The money laundering charges carry a fine of up to $500,000 and an added money laundering penalty of up to $500,000.
Second-degree charges carry a sentence of five to 10 years in prison and a fine of up to $150,000, while third-degree charges carry a sentence of three to five years in prison and a $15,000 fine.
Lipka's attorney, Howard Bailey, and Shelly Lipka's attormey, Julian Wilsey, did not immediately return requests for comment.